IAS 7: the new starting point

Learning objectives

• Explain the new starting point of the indirect method.L2
• Calculate the operating cash flow from operating profit or loss and the adjustments in the case.L2, L3

Normative references

The syntheses of the reference register are written in French: only the paragraph reference is shown here.

3 questions

• With the indirect method, the starting point of the reconciliation of operating cash flows remains profit for the year under IFRS 18.L2
• Nacre SA prepares its statement of cash flows using the indirect method, under IFRS 18. Its operating profit is {operating_profit}. It includes non-cash depreciation of {depreciation}. Inventories increased by {inventory_increase} and trade payables by {payables_increase} during the year. Case convention: no other adjustment, interest and tax paid being dealt with separately. Calculate operating cash flow before interest and tax.L3
• Brume SA, which used to start from profit before tax (EUR 840,000) to reconcile its operating cash flows under the indirect method, moves to IFRS 18. What is its new starting point?L2